Humankind has been mesmerized by the power of the Sun for millennia. The idea of a sun deity is pervasive across many religions, cultures & geographies including the Egyptian Sun God, Ra, the Hindu Sun God, Surya, the Greek deity Helios, and numerous other examples throughout the Aztec Empire, Native American tribes, Buddhism & ancient Mesopotamia. Since the origins of agriculture 11,000 years ago in the Fertile Crescent, we have been learning to harness the power of the sun to grow crops to feed our hungry population. Now we are turning again to our solar system’s life force to feed our energy hungry world with Solar Power.

Energy is one of the most essential parts of our global society. Access to energy is intertwined with most of the key economic functions of society as it is necessary for modern day agriculture, waste & water management, heating & cooling, transportation, communication, industrial, commercial & residential uses. As we consider ways to combat the societal effects of global climate change, a sustainable energy policy including solar energy is an essential tool in order to provide us a way to reduce pollution & future greenhouse gas emissions from fossil fuels while also ensuring that we have a renewable and cost effective source of energy to sustain the necessary societal systems.

The solar energy industry has been around for more than 50 years now and the benefits & potential of the industry to power the world are not a huge secret. The Sun produces an abundant, renewable, & clean source of energy that is capable of fulfilling all of the world’s current energy demands however there are issues with intermittency, storage & transmission of energy, and of course cost competitiveness with other energy options such as oil, natural gas & coal. However within the past few years we have seen the economics of solar energy shift in a positive direction with the prices of photovoltaic (PV) cells plummeting due to the increase in supply, mostly from Chinese producers.

The current usage of solar energy in the world is still only about 0.25% of the world’s total energy consumption, however the installed capacity of solar power is increasing around the world at an incredible rate. Installed capacity has more than doubled in the past 2 years from close to 40GW to more than 100GW. Countries like Germany, Italy, China, USA, & Japan all have installed capacity of greater than 5GW with Germany leading the way at 33GW largely due to a friendly subsidy & regulatory environment. Even oil producing Saudi Arabia has jumped onto the solar energy bandwagon by announcing plans to produce 41GW of solar energy by 2032. India recently joined the club of countries who have installed solar capacities of at least 1GW by more than doubling its installed solar capacity during 2012, largely due to the Jawaharlal Nehru National Solar Mission a government subsidy program which aims to have installed capacity of 22GW by 2022. Much of this growth in installed capacity has been achieved through the development of utility scale solar farms some with hundreds of MW of capacity. These sorts of initiatives can be a successful way to develop solar capacity in high insolation areas like the states of Gujarat & Rajasthan in India as well as the Mojave desert of California in the USA and with the help of various subsidies can allow for independent power producers to profitably supply clean renewable energy to the grid. Furthermore, by developing a local solar energy industry, countries have the ability to create local jobs in high tech manufacturing in order to supply the needed parts and equipment. As costs continue to decline, these solar farms with their zero cost fuel source (sunlight) will eventually reach grid parity and will become cost competitive without subsidy with other forms of utility scale energy especially as policy makers begin to phase out some of the $500 billion in subsidies to production & consumption of fossil fuels around the world.

Due to the ability to decentralize solar energy production, there are numerous alternative models to the utility scale solar farms for distribution of solar energy, particularly for off-grid communities. Innovative businesses in the USA, Sub-Saharan Africa and India have already discovered how to provide the power of solar energy to consumers in a more cost effective way than current alternatives. These solutions include a variety of approaches based on the context of the specific customer segment. In the USA companies like Sun Power provide residential solar panel installations that allow consumers to save on their monthly energy bills, cash in on tax credits & rebates, and increase the value of their homes. In addition solar installations can allow for payback periods as low as 5 years and savings of up to $30,000 over the 25 year life of a system. Companies like Solar City are using a different approach by leasing solar energy. This approach allows customers to power their homes with clean solar energy without the upfront costs of solar panel purchase and installation. The Solar City model still provides the ability to sell additional capacity back to the grid creating additional savings on monthly electricity bills. A company called Simpa Networks is using a similar pay as you go concept through its metering & payment system in off-grid communities in India in order to provide for the radical affordability of this technology in rural areas . After installation of a household solar energy system customers are able to prepay for solar energy through their mobile phone in small user-defined increments. In this way the payment mechanism seeks to replace current purchasing habits of more polluting & dangerous kerosene or diesel. Furthermore each payment goes towards the overall purchase of the system allowing for customers to eventually unlock the system providing free energy for the remaining life of the unit. Another company called d.light designs is selling solar powered lamps across the developing world providing a higher quality & cleaner source of light to millions of people worldwide without access to reliable electricity. In these cases, beyond just access to electricity, solar energy is providing the economic benefits of connectivity and increased productivity for these rural households.

The applications of decentralized solar energy across the developing world have enormous potential. In India the costs of extending the existing grid to rural & mountainous areas are prohibitively high in many places and the current methods of using kerosene and diesel for light & power are more polluting, have negative health effects, and can be more costly when compared with solar power despite widespread government subsidies of fuel for the poor. There is a huge opportunity to provide clean, decentralized electricity to these communities through micro-grids & household systems and solar energy could be a great way to produce the electricity to power these systems. On a recent visit to Hosur, an industrial hub outside of Bangalore, I witnessed a community of small manufacturing businesses running their manufacturing processes on diesel generators as the electricity supply was intermittent at best. For these businesses, diesel costs can make up a significant portion of their operational expenses and the need for these systems causes the local environment to be polluted with the fumes, noise & smell of diesel generators. There are thousands of small industrial sites like this throughout India and countless more around the world that could all benefit from small scale solutions providing more cost effective & cleaner solar energy.

Over the coming decades installed capacity and usage of solar energy will continue to increase worldwide as costs continue to decline with improvements to technology related to capture, conversion, storage & transmission and as policy & regulatory environments are adapted to help facilitate access to these beneficial technologies. As new models & applications are created the distribution of solar energy can become widespread throughout the developing world leading the charge of electrifying the 1.3 billion people worldwide without reliable access to electricity. Furthermore as solar energy helps to facilitate decentralized & local energy production, countries & individuals will become more energy independent reducing the risk of international conflict over finite energy resources that are vital to economic growth. Innovative designs incorporating solar energy could revolutionize everything from transportation to clean water systems. As the dawn of the solar age fades, the future of solar energy looks bright.

This past Sunday I had the privilege to meet fellow solar energy enthusiasts Catlin Powers, Co-Founder of One Earth Designs, and Colonel Varma, a retired Indian Army veteran for Sunday brunch. This was no ordinary meal however. Everything we ate was cooked out in the open sun on One Earth Designs’ Solar Cook Stove the SolSource.

Catlin & Colonel Varma getting ready for the solar meal

Solar cook stoves have been around for a number of years now and are aiming to solve a critical issue both in environmental & human health. There are around 3 billion people worldwide that rely on pollutant solid fuel sources such as coal, wood or cow dung and use these fuel sources in an open fire within their homes for both cooking and heating needs. Needless to say daily inhalation of the smoke emitted by these indoor fires is a huge health concern, ranked by the WHO as one of the worst health risks facing the poor, and needlessly killing almost 2 million people a year, more than malaria and almost as many as AIDS worldwide. Collection of firewood is also huge time & energy burden in many low income areas requiring the need to carry the close to 50lbs of fuel wood as much as 10km one way each week. Furthermore the felling of trees for fuel wood results in ongoing deforestation and as forest areas are depleted, families must travel even longer distances to collect fuel resources.

Father & Daughter carrying fuel wood through the hills of Western Guatemala

Solar cook stoves provide a healthy alternative to the polluting fuel sources currently used for cooking in addition to saving families time & energy and helping to protect the world’s remaining forest areas. Furthermore the solar energy used to power the stove is free and renewable so the cook stove becomes an economical alternative to weekly purchases of more expensive coal in many rural areas.

There is certainly an obvious need for these products, but markets sometimes function in strange ways and need doesn’t always translate into demand. One of the most difficult things to do in the world is to change existing behaviors. Stories abound of markets being flooded with cheap and even free solar cook stoves only for the stoves to be left unused and even found being used as door stops. Just as in any start-up when designing a solar cook stove it is important to design a product to suit the particular needs and desires of your target customers. Simply designing a cook stove that appeals to donor or investor groups without validating the product in your target market will not necessarily produce a quality product that is sought after by your customer base.

SolSource in action

Catlin Powers, Co-Founder of One Earth Designs, understood this from the beginning. After growing up in 4 different continents, living a bit of a nomadic life herself, Catlin went on to attend Wellesley College where she left after her sophomore year in order to go live and study for 2 years with the nomads on the Himalayan Plateau of western China. She originally went to study the effects that the pollution emitted from the new coal-fired power plants was having on the Himalayan climate, but after spending time living with the nomadic families she quickly realized that the more pressing issue with pollution was the one going on within the homes of these families. This understanding led her on a journey through a PhD at Harvard University on Environmental Health to the founding of One Earth Designs and the design of the SolSource solar cook stove with the specific needs and desires of the inhabitants of western china in mind. After numerous test models and validation trials with various customers they came to the current design which includes various user friendly attributes such as a dial to control temperature, a surface that is scratch resistant, not hot to the touch, and a system durable enough to withstand the high wind speeds of the Himalayan Plateau, but lightweight and compact enough to fit into a trekking backpack which can be carried around if needed. The product has won numerous awards including the 2009 MIT IDEAS Global Challenge & 2011 Unreasonable Institute fellowship.

Venture capitalists often use the idea of “betting on the jockey not the horse” when choosing potential investments. This is basically the idea of investing in a person or a team rather than a specific product or service idea as in the world of start-ups business models & concepts can change quite fast. Catlin Powers is the kind of intelligent, passionate, and ambitious individual willing to travel around the world spreading her message that is a great example of a “jockey” that I would be willing to bet my money on. In a world full of solar cook stove alternatives this is an essential aspect of a successful start-up social enterprise.

Bangalore, known as the “Garden City” or the “Silicon Valley of India” is a city of about 8.5 million people and the capital of the south Indian state of Karnataka. The city is booming with the energy of an emerging global city but like the rest of India it is a land of contrasts.

In the early 1900s Bangalore was a city of about 100,000 people. Its population crossed 1 million for the first time in the 1960s, hit 4 million by the 1990s, and has doubled in the past 20 years reaching todays population of 8.5 million. This population growth has generally been fueled by the economic prosperity of the city and the perceived economic opportunity has inspired millions to migrate to the city from towns in the surrounding states of Karnataka, Kerala, & Tamil Nadu. (Just among the people I work with are people from Kerala, Tamil Nadu, & Maharashtra & the languages of Hindi (National Language of India, mostly spoken in the north), English, Kannada, Tamil (Tamil Nadu), Telugu (Andhra Pradesh) & Malayalam (Kerala) are all represented… and that’s only among 4 people!)

Much of this economic opportunity in Bangalore is due to the boom in the IT sector and has attracted numerous large global companies such as IBM, Microsoft, Intel, & Google and serves as headquarters for the Indian IT giants Infosys & Wipro. Not only is there great economic opportunity with these companies, but all of these companies have been ranked among the 10 best places to work in India. Furthermore, with a talented workforce & entrepreneurial spirit abound, Bangalore is ranked among the top 20 cities in the world to start a business alongside places like Silicon Valley, Tel Aviv, New York City, & London.

Development does not come without costs however. With the cities incredible boom in population growth the infrastructure has struggled to keep up. Travel within the city of Bangalore can be a struggle, due to the congested roads & accompanying pollution. The ongoing construction of the metro system has been consistently delayed and currently only runs a length of 6 km. Waste is another issue in the city as the landfills are over capacity and with the lack of adequate trash collection in some areas it is still common to see piles of burning trash littered along street sides. Furthermore, development has not reached everyone, especially the unskilled workers who are not qualified for the glamorous IT jobs, although a Rickshaw driver in Bangalore would still earn more than their counterpart in Hosur. There still exist slum units within the city where residents don’t have access to running water or electricity, although again a substantially smaller proportion as compared to other large Indian cities such as Mumbai or Delhi.

An interesting conflict facing the “Garden City” is the tension between the green open spaces & charming atmosphere that brought it the name of “Garden City” and the development that has brought economic success, material wealth and the new title of “Silicon Valley of India”. More roads, transportation infrastructure & real estate are necessary in order to house, entertain and transport the millions of new city residents, however in order to provide this infrastructure many of the open green spaces that the city was famous for have been replaced. Even the famed Lal Bagh garden, with 240 acres of trees hundreds of years old from all around the world, was at risk in 2009 due to the expansion plans of the city Metro. Throughout the city center and various pockets of Bangalore you are more likely to see large shopping malls than blooming gardens, however the “Garden City” atmosphere is still very much alive in places like Indiranagar where community parks and household gardens are a common sight.

As a foreigner in Bangalore, one thing that sets it apart from other Indian cities to me is the surrounding greenery, birds & plant life that provide for a very pleasant and livable atmosphere. In some senses it is a bit of a luxury to place this kind of value on the aesthetics of our natural surroundings, as it may be difficult for someone who is chronically malnourished and lacks access to clean water to enjoy the pleasantries of the spring bloom, but this luxury is the same one that allows for people to place value on a shopping mall or other material items. I suppose that after the basic necessities of food, water & shelter have been met, where we see value becomes somewhat of a matter of preference. At the same time when the preference for development begins to negatively affect the health of the ecosystem we live in, this becomes more of a societal issue than just a matter of preference.

Issues in Bangalore related to water pollution & shortages as well as accumulating waste cannot be solved through increasing economic prosperity alone. It requires that we begin to place value on the necessary natural functions of life that we have taken for granted throughout the past centuries. Resources like clean water, clean air, good quality soil, and forest products have been used and generally depleted without taking into account their true value to society. It is important that we begin to take into account the true value of these resources so that extractive development models that actually destroy our natural sources of capital aren’t promoted. There are certainly innovative, technological designs that can help us to manage these systems whether it is energy efficient (& zero discharge) factories, homes, offices & cars, renewable energy systems, water treatment systems, & recycling/above ground mining systems. A technology & business friendly hub like Bangalore would be a great place for these sorts of operations to set up. After all at some point the world needs more innovation than just another smartphone app.

“If you think you are too small to make a difference, try sleeping with a mosquito.” – Dalai Lama

I have just returned from a few days at the Maha Kumbh Mela, a Hindu religious festival in Allahabad, Uttar Pradesh located at the Sangam which is the confluence of the holy rivers Yamuna, Ganga, and the mythical Saraswati. The festival is said to be the largest gathering of people on the planet and occurs only once every 12 years in Allahabad. Tens of millions of pilgrims are expected to have come to the 2013 Maha Kumbh Mela over the span of the 55 day festival in order to perform a ritual bathing at the Sangam which is said to wash away the sins of a lifetime and achieve Nirvana, releasing you from the cycle of reincarnation. Along with the ritual bathing, numerous Ashrams are set up throughout the festival grounds where housing and food are provided for all free of charge.

This religious festival provides some interesting insights into humanity & the world of social enterprise. Many of the pilgrims who attend this festival have completely renounced material possessions and are more inclined to gain spiritual wealth rather than economic wealth. While this specific example of the lifestyle of the Sadhus is a bit extreme, I just want to bring attention to the fact that wealth for many people can incorporate more than just the accumulation of monetary and material resources. Wealth could be considered Health plus Peace of Mind and can incorporate a variety of things such as good relationships, a sense of community, freedom, stability, fulfillment and good health. However it has also been shown that a general sense of well-being comes from the many benefits of economic progress. In this sense social enterprises can certainly help guide people towards a greater quality of life through providing & enabling improved access to such empowering things as healthcare, energy & education. At the same time let us realize that happiness and good quality of life are complex states of being that are relative to individual circumstances and cannot be achieved through the benefits of economic progress alone. By searching for this great balance in our own lives we are able to strive towards the true wealth of being.

“Heaven is within you, seek Happiness not in the objects of sense; realize that Happiness is within yourself.” – Vedanta Quote

I am all set to leave for Bangalore at the end of this week to begin my work with Kinara Capital. Kinara Capital is a start-up social enterprise that provides access to credit to small enterprises in India with the goal of supporting local entrepreneurs, increasing incomes, & creating sustainable businesses. There are 26 million small enterprises in India who struggle to obtain financing to build and grow their businesses. Only about 5% of these enterprises have access to the capital they require. In fact according to a report released by the International Finance Corporation (IFC), part of the World Bank Group, the debt gap alone for small & micro enterprises in India is about $198 billion.

There are investors willing to invest in equity but these investors generally overlook small enterprises unless there is a huge potential upside. Furthermore, for these small & start-up enterprises equity is a very expensive way of financing their business especially when their capital needs are only seasonal or cyclical. The debt financing available in India generally consists of commercial lending from traditional banks as well as microfinance loans from microfinance institutions. Traditional banks, including international banks like Citibank & HSBC or Indian banks like ICICI & HDFC, generally have strict lending standards and are unwilling to make small loans to these small enterprises especially without some form of collateral. The underwriting process would be just as costly for issuing these smaller loans and would be perceived to be much riskier and therefore the traditional banks tend to put their funds to work elsewhere. Microfinance institutions have stepped in and have been willing to provide some of these smaller uncollateralized loans. There are a number of large microfinance organizations present in India including SKS, Equitas, & Bandhan and the microfinance industry as a whole in India has about $2-3 billion in outstanding loans according to the Economist. However, based on the regulations in place microfinance loans are capped at 50,000 rupees or just under $1000 making them difficult to use to finance growth in a small business. The other option for small enterprises is local money lenders or loan sharks who have been known to charge annualized interest rates in excess of 100%. There is an obvious funding gap here between microfinance and commercial capital that could be filled by a formalized lending process to small enterprises and would greatly benefit the enterprises involved.

It is this gap in the current financing ecosystem that organizations like Kinara Capital seek to fill. By providing uncollateralized loans in the range of $2000 to $20,000, Kinara provides access to credit for the millions of small enterprises who are left out of the current financing system. Kinara currently has outstanding loans of approximately $400,000 with a repayment rate of 100%. This type of repayment rate is unheard of in traditional lending, not to mention uncollateralized lending. Kinara has accomplished this level of success through their innovative lending practices where they seek to utilize and integrate into existing supply chains allowing them to have a better understanding of the relationships and businesses that they are dealing with. In addition Kinara has a strong focus on the customers they serve and even provides financial management training and business diagnostics to their borrowers. With their current success Kinara has a vision that in 5 years they will have a loan portfolio of $100 million, have funded 20,000 small enterprises, creating 100,000 jobs and impacting 1 million lives. There are certainly challenges involved in reaching these goals including raising capital and the ever changing regulatory environment for Non-Bank Financing Companies in India but I am excited about the prospects of this young start-up social enterprise.